Geofencing: The future of Targeted Marketing

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A perfect amalgam of physical sales with online marketing is possible with geofencing. Brands can provide contextual experiences to the users when they are present inside the location of interest. Geofencing Marketing enables marketers to tap consumers’ physical location and roll ads to their mobile devices based on it. This hyper location targetting could prove wonders, as the data from “Market Research Future” suggest Global Geofencing Market is estimated to grow at a CAGR of 27% from 2023. Geofencing is an optimal tool for marketers but carries privacy concerns in it. This article will put light on all the aspects of Geofencing and try to predict future endeavours of the same.

The geofencing API’s from tech manufacturers have enabled developers to trigger events in apps based on the device location. Technologies like GPS and RFID get used for the same. A geofence is a virtual marking made upon a physical area. Personalised ads or push notifications can be triggered when a consumer enters the region of interest.

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The strategy is to target the consumers with ads when they are most receptive to them. Physical business benefits the most from geofencing as they are looking for consumers in their vicinity. For instance, a petrol station puts up a geofence around it on a highway and successfully deploys ads on drivers mobiles, imagine how beneficial it will be. Another use-case is in large gatherings like sporting events or music concerts. The Merchandise of the same event can get marketed with online ads a few days later. Instantly, a bunch of audiences will get targeted without any other data parameter.

Geofencing works only when the device is sharing its location, but as statics show, 90% of mobile users do not care and even are willingly ready to share their location if they get better propositions next to it. Starbucks App is an example where users voluntarily opt-in for getting notifications when they are near a store. Starbucks also provides discounts for them.

Geoconquesting is a more competitive way of geofencing. Here, brands plot geofence around the stores of their competitor. Consumers see better-personalised deals when they are in the competitors’ stores to lure them back.

Studying the case of OLX in India is enlightening: OLX used hyper-location targeting using pin codes to geofence physical resell markets of automobiles and mobile phones. They showed the brand’s ads and offers to the target audience explicitly when they were near these resell zones assuming they have come there to sell or buy pre-owned goods. It was a six-week-long campaign, and they saw over five hundred thousand unique users with the cost per unique reach was mere three paise. The click to install app was four times more than other campaigns, in which 60% of installs resulted in transactions.

There are typically two buying models of geofencing service: CPM Model, which is suitable for brand awareness campaigns, and the CPV Model, which monitors and charges only when a consumer has seen the ad and visited the physical store. The charges vary on how localised or narrow your targeting is, also based on the targeting tactics used for the campaign and additional data layers used. But overall, the ROI is high as better targeting means lower people to reach.

Though in this all good story for a marketer, consumers should not feel deprived of their privacy. Sending notifications each time they enter an area will be creepy, and the thought of your location shared constantly can be overwhelming. It is always a good idea to keep opt-in conditions transparent and customisable. Constant spamming is disastrous for brand image. Marketers should also align their strategy with digital privacy regulations in respective countries.

North America has seen significant use of geofencing due to tech giants present there. While considering the Indian scenario, geofencing is a relatively unexplored realm. Digital marketers have an opportunity here to provide geofencing services to local businesses. Local business needs to act now, or they will start losing their customers soon.

In the near future, geofencing will broaden its perspective with location-based offers and services. There may be gamification of visiting physical locations, like some malls with branches around the country will give points for visiting them when you visit different cities. Travel apps will show better route recommendations based on previous journeys. You will never have to find a gym when travelling.

After considering all the facts, it is safe to say that Geofencing is going to the future. It is an effective way to boost traffic to physical stores, and the data collected will help marketers make profitable decisions. Moreover, there will be much potential in a growing economy like India. Both the developers and marketers will get a chance to prosper with the brands.

Photo by Vlad Busuioc on Unsplash



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Amogh Pete

Amogh Pete

Hey, I am a creative person with enthusiasm for marketing-related stuff. I am a computer science and engineering undergraduate with a curiosity for blockchain.